The Directorate of Enforcement (ED) Lucknow Zonal Office provisionally attached 86 land parcels worth ₹31.94 crore in connection with the Shri Lakshmi Cotsyn bank fraud case. The attachment was carried out under the Prevention of Money Laundering Act (PMLA), 2002, as part of an ongoing investigation into financial irregularities committed by Shri Lakshmi Cotsyn Limited. The properties, primarily agricultural land, are situated in Chhattisgarh’s Bhatapara and Baloda Bazar districts and are registered under the names of the company, trusted employees, and other individuals.
Bank Fraud Allegations and Initiation of ED Investigation
The ED launched its investigation based on an FIR filed by the Anti-Corruption Branch of the Central Bureau of Investigation (CBI) in New Delhi. The case began after a senior Central Bank of India official filed a complaint in June 2021 against Shri Lakshmi Cotsyn Ltd, including key figures such as Mata Prasad Agarwal (Chairman and Managing Director), Pawan Kumar Agarwal (Joint Managing Director), and other directors and employees. The allegations involve cheating, criminal breach of trust, conspiracy, forgery, falsification of accounts, and misuse of public funds between 2010 and 2018.
The investigation revealed that Shri Lakshmi Cotsyn Ltd had sought loans from a consortium of 23 banks, led by the Central Bank of India, for manufacturing textiles. Due to mismanagement, these accounts were marked as Non-Performing Assets (NPAs) by individual banks. A forensic audit indicated several violations of loan agreements, including inflated inventory records, manipulation in the auction process, and undisclosed transactions with related parties. Further, the company allegedly provided unauthorized discounts totaling ₹207.29 crore to related entities and customers, with some transactions linked to fictitious addresses.
The ED found that funds from Shri Lakshmi Cotsyn Ltd were diverted to its group company, Shri Lakshmi Power Ltd, and subsequently transferred to individuals via an ICICI bank account in Baloda Bazar, Chhattisgarh. These funds were then used to acquire land registered in the names of trusted employees and local residents, many of whom were tribal people in Chhattisgarh.
Liquidation and Debt Recovery Efforts
Shri Lakshmi Cotsyn Ltd underwent liquidation under the National Company Law Tribunal (NCLT), and assets worth approximately ₹265.44 crore were sold to help recover debts. The case involves an outstanding loan amount of ₹7,377 crore, already declared a fraud by the Reserve Bank of India (RBI). The liquidation and attachment of assets are part of efforts to recover these funds.
The ED continues to investigate financial misconduct by Shri Lakshmi Cotsyn Ltd and associated entities. The current attachment of 86 land parcels represents a step in the legal and financial process to address the large-scale bank fraud associated with the company.
